AI breakthroughs, market growth
Article by
Gadjo Sevilla
EMARKETER: A year of AI expansion: Google focused on AI innovation—integrating its
Gemini AI across products while addressing safety concerns and fierce competition from
OpenAI,
Microsoft, and
Meta.
Alphabet, Google’s parent company, reported a 15% YoY revenue increase in Q3 2024, reaching $88.3 billion, but now faces mounting regulatory pressure, including a potential
Chrome browser breakup that threatens its search dominance.
Google’s continued AI expansion: Google is a key player in the AI economy, driven by breakthroughs like Gemini, which has
outperformed OpenAI’s GPT-4 in mathematics and creative tasks.
- AI is now embedded throughout Google’s operations, including within coding—AI generates 25% of new computer code created in the company.
- AI Overviews in Google Search is reshaping ad placements, Android devices are getting Gemini updates, and AI-powered Chromebooks aim to capture new consumer segments.
Gemini’s safety issues—
hallucinations and erratic responses—underscore the risks of rapid AI adoption without substantial guardrails.
But challenges abound: Google is far and away the revenue leader in search, earning $49.4 billion in revenues in Q3 2024. But upstarts like
OpenAI and
Perplexity are taking advantage of Google’s early missteps to gain search and AI market share.
Competition looms within the device and advertising markets too, as
Microsoft and
Apple embed AI, and
Meta grapples with monetizing its own AI investments to transform ad markets.
Google Cloud rises: Google Cloud saw a 35% YoY revenue increase, fueled by AI demand and partnerships like the one it shares with
Citi to overhaul the latter’s infrastructure. It’s a trend that’s continued to grow in 2025 as companies look for AI-capable cloud services.
Antitrust regulation could hinder growth: The
Department of Justice’s (DOJ)
push to break up Google’s monopoly could force the sale of the Chrome browser, potentially fetching $20 billion for Google but resulting in significant loss of business.
